Borrowing coins to short, going long on contracts to earn negative funding fees—this strategy can let you pocket some hefty funding fees a few times. But one wrong move, and your principal could be wiped out completely. Unlike the traditional method of earning positive funding fees, if the leverage is super high, the price difference is usually only 10%-15%. Even if the position is large, you can still grit your teeth and cut your losses. Contracts have depth. Plus, if the price difference gets too big, other arbitrageurs will step in to arbitrage and bring the price difference down. With spot borrowing, if the price gets pushed too high, closing your position is basically shooting yourself in the foot. On top of that, other arbitrageurs won’t be able to borrow coins to help lower the price difference. That’s why you sometimes see spot prices being several times higher than contract prices. At that point, you won’t even know whether to add margin or not—it just feels like the more you add, the more you lose. Think it through carefully.